• Weekly problem sets and reading responses
• Midterm
• Final

My office hours are by appointment.

Recitations are for:

• Discussion of broader issues
• Explanation of questions from lecture
• Review of lecture material

Today we will address the “development” side of Sustainable Development. Two main questions to address:

1. What is development as a historical phenomenon? (Development as fact)
2. What should development be? (Development as ideal)

In the context of Sustainable Development:

1. What is development?
2. What are its characteristics?
3. When did it start as a phenomenon? (i.e. when did societies start “developing”)
4. When did it start as a concept? (i.e. when did people start talking about “development”)

Definition: the act, process or result of growing and becoming more mature, advanced, or elaborate.

Development as a social evolutionary concept, where societies go through stages:

1. Hunter-Gatherers
2. Agricultural
3. Industrial
4. Consumption-service economy.

Economic development was part of a broader, modernist (19th century) ideology of “progress.”

We can take “development” as being value-neutral, and define it as the process of moving towards a high-consumption service economy, such as the US, Europe and parts of East Asia today.

This kind of “development” has mostly occurred in Europe, North America, and East Asia. Development economics and much of economic history has been grounded in this topic: why are some countries rich and others poor?

Prompt: Why should a service-based, high-consumption economy be ranked higher than a poor, agrarian economy? On what grounds?

1. Post-1945 experience has shown that societies need not go through these stages to achieve desirable outcomes (e.g. Kerala and Costa Rica);
2. Development-as-stages has been used to justify colonization, imperialism, genocide and destruction.

Recent economic history has shown that countries need not go through these stages of development. There are many paths towards a literate, healthy society.

Key example, the Indian state of Kerala:

• 35 million people
• GDP per-capita of $3000
• Life Expectancy of 78 years
• Literacy of 96%.

Conclusion: we do not require “development” in the traditional sense of the word in order to achieve desirable outcomes.

The development-as-stages has been used to justify racial and cultural hierarchies: i.e. more advance societies must “lead” the more backwards.

Within societies, development has been used as a pretext for the murder and destruction of local cultures: e.g. the indigenous people of the USA and the peasantry of the USSR.

Is development a useful concept?

If so, why?

If not, what would you replace it with?

How can we compare societies? The implicit goal in development is an ordinal ranking of states of the world– i.e. would you rather live in world A or world B?

John Rawls proposed the thought experiment of choosing between worlds from behind a “veil of ignorance.”

Sen, in Development as Freedom expresses living standards as (positive) human rights, what he terms “capabilities.”

• Health
• Material goods
• Education
• Civil Rights and Community
• Leisure
• Type of work
• Arts
• Nature

While appealing, Sen’s capability approach does not allow for ordinal ranking of societies, except within a single dimension.

How can we compare drastically different cultures?

Anecdote: “you just want to turn Niger into Germany!”

Historical example: the (incomplete) adoption of European social norms by Japan after the Meiji Restoration.

Is there necessarily a trade-off between economic development and conservation of local cultures?

Would you rather live in the world of 1950? Or the world of today? Why?

Given different dimensions, how can we construct a single-dimensional index in order to make comparisons?

One answer: make arbitrary assumptions. E.g. the calculation of HDI.

\[ HDI = \frac{\frac{LE-25}{85-25}+ \frac{MYS+EYS}{2} + \frac{log(GDP)-log(100)}{log(75000)-log(100)}}{3} \]

where LE is life-expectancy, MYS and EYS are mean and expected years schooling, and GDP is gross domestic product per-capita.

In economics, this aggregation on the individual level is done via a utility function, which takes a large space of “goods” and maps it onto a single-dimensional ordinal scale.

Given a group of individuals, how do we construct a measure of group welfare, as opposed to individual?

How do include inequality?

One answer: average. The HDI, as seen above, takes simple averages of life expectancy, years of schooling and gross national product.

In economics, the may be done with a social welfare function. For example, see the Gorman aggregation, which allows a collection of consumers to be treated as a single consumer. Another example, consider the homothetic preferences used in international trade theory.

What it is:

• The sum of marketed, final goods within a political boundary, weighted by the market prices of said activities.

What it isn’t:

• A measure of national income. That would be GNI. E.g. Ireland’s GDP is 20% lower than its GNI. How is this the case?

• A measure of economic activity. Historically, the vast majority of productive activity was non-marketed and therefore excluded from GDP.

Evaluate the statement:

World GDP per capita is $ 18,000 per year. By the UN definition, poverty is an income of less than $2 a day. Therefore, the only thing needed to eliminate poverty is to redistribute income.